I would be lying if I didn’t admit that Brad DeLong and his fellow traveler Paul Krugman didn’t send me into a rage with their inane and insane proposals. But it’s still worthwhile to mention this article, because it represents all of the incompetence that has held the United States back, and merely adds one more obstacle to overcome (the unstoppable left-wing urge to intervene and meddle) on the road to recovery. One of the best and most depressing books I read in recent years was Amity Shlaes’ The Forgotten Man. Unlike DeLong’s broken study of the Great Depression, Shlaes’ research shows how FDR’s unpredictable and constant meddling with the economy inexorably crushed the recovery and extended the Great Depression. How many times must it be said? Businesses require stability! Stop the madness! </rant off>
Do I need to say more than the headline? Filed under: Groundhog Day.
Abenomics is yet another failure for Japan. It’s sad to see Japan’s continued struggle to regain economic dynamism after 20 years of waiting for it to clean up its act. I was very optimistic when Hashimoto implemented his “big bang” financial liberalization program, and then when Koizumi followed up with his privatization plan. However, much remains to be done in the realm of structural reform. PM Abe’s “three arrows” rhetoric has failed to produce results in the third arrow, structural reform.
Foreign Affairs has a piece out lamenting the lack of progress in this area. Low-hanging fruit includes trade liberalization:
Both the FT and the WSJ have been pursuing this theme recently (the FT’s series is titled, appropriately, “This is nuts, when’s the crash?“). We experience a downturn, the government and central bank acts to inflate an asset bubble in order to ameliorate the effects of the downturn, and this bubble sets the stage for the next downturn.
Here are some of the key points of the WSJ piece:
Financial market risk-taking is reaching excesses comparable to those that precipitated the global financial meltdown, Jose Vinals said at a Peterson Institute for International Economics event.